Interview: Ride The Digital Wave

(This was the cover story for the October 2005 issue of Marketing News)

Marketing News:
Why do you think advertising executives are finding it challenging to manage their online media and digital marketing efforts?

Pedro Laboy:
Speed of change of technology makes this a challenging medium.  More importantly, most companies and their agencies are not adapting to new technologies at the same pace that consumers are.  This is due to a combination of lack of skills and insufficient resources.

Marketing News:
How much should advertising execs carve out of their budget for testing and/or market research to help with their online media efforts? And what type of research should be conducted in order to obtain the most efficient and useful solutions to help ad execs get the answers they need?

Pedro Laboy:
We believe that testing and market research should be an essential component of every company’s marketing mix.  Increases in testing and research will undoubtedly result in more effective traditional and interactive marketing and advertising.  However, the more money you spend in research and testing; the less you will have for execution.  There is no magic formula.  The investment in testing and research required will be a factor of product, business model, desired outcome, and industry in question.  We recommend that clients lean on marketing mix modeling when making marketing investment decisions—including research and testing.

We believe that the type of research that is conducted should always be based on well defined objectives.  Typically qualitative research is done for creative ideation and refinement.  On-line focus groups can be extremely efficient to gather this type of information.  Groups which span several days are particularly appealing because they allow alternative messaging, copy or imagery to be developed and tested while the groups progress.  However, traditional in-person focus groups are still very cost effective and have the added benefit of the face-to-face interaction.

If the ads are delivered online with a direct response goal, then real-time, in-market testing is an extremely efficient way to determine what specific messaging, imagery and media work best.  However, if the campaign’s goal is not direct response (for instance, if the goal is to raise awareness or change the brand positioning), then surveys of the target prior to and after the campaign should show the impact on the key measures.  Online surveys are generally the most cost-effective; however, on-line samples are typically not as high-quality as random samples conducted via phone.  So a trade-off generally has to be made.

Marketing News:
One source said that ad execs should look at ad agencies to help guide them with their online media efforts. What specifically should they look for in an agency?

Pedro Laboy:
Good agencies meet all of the following criteria:

•    They focus on solving the client’s problem and providing them with business building ideas

•    They are knowledgeable about the client’s industry, products, and customers

•    They are opportunistic and entrepreneurial

•    They drive efficiency and effectiveness by measuring and optimizing

•    They are in alignment with the client’s marketing and business goals

•    They are flexible and adaptable and thrive in a fast-paced environment

•    They keep pace with changing technologies and the changing consumer

Marketing News:
How can ad execs get ahead and stay ahead of the curve? In the study I cited, many executives feel that managing online media efforts is difficult let alone staying ahead of the curve.

Pedro Laboy:
The best thing marketers can do is to stop viewing online media as “the other media.” Media neutrality is key to successful communication efforts. Today, online media should be central to all marketing efforts. Tomorrow, the concept of online media will be as trite as the concept of a digital clock.  Generation X and Y consumers no longer differentiate between online and offline media.

Relative to managing online media efforts, the difficulty is primarily in clearly understanding objectives and measuring success. Implementation and deployment should not be difficult to manage if you have a competent agency.

Marketing News:
How will online media and digital marketing change the course or future of advertising, as we know it today? Do you think online media and digital marketing will overshadow television advertising, eventually, or is that impossible?

Pedro Laboy:
Three factors will define the future of advertising: media fragmentation, technology convergence, and the changing consumer.

a.    There are more than 1,600 (Forrester) broadcast and TV channels in the US alone.  Add to that outdoor, print, radio, mobile, and web and the number of media available to marketers are almost infinite.   As a result TV has lost much of its effectiveness.  According to Forrester Research TV ad recall plummeted from 40% in 1960 to 6% in 2003.

b.    Technology is rapidly changing in order to keep up with media fragmentation.  In the future, consumers will own devices that will give them access to multiple media.  Some of these devices are already entering the market.  Take the PSP from Sony for example.  It gives you the ability to access video, music, gaming, TV, web, and GPS mapping.  Future versions will include phone and email access.

c.    Today’s consumers are defined by what we refer to as “M3.”  That is, multitasking, multimedia, and mobility.

Marketers need to think not only beyond TV but also beyond “online” and “digital” media.  Successful companies and agencies of the future will leverage technology and data analytics to develop media neutral ideas that resonate with individual consumers.  And media content will have to be interactive and delivered on cue.  That is, advertising will reach the right consumer at the right time.  We call this “Ubicom” or ubiquitous communication.

Marketing News:
Do you think ad execs are making a lot of mistakes in their online media efforts, and that’s why, in part, they’re so frustrated? What types of mistakes might they be making?

Pedro Laboy:
The biggest mistake we see is that marketers look at online media as a channel independent of other media.  They overlook opportunities for integration with mobile, web, rich media and other channels. They are limiting the online experience to a banner and a form, when there so many tools available to them.

Other mistakes include:

•    Lack of alignment with the company’s business goals

•    Unwillingness or inability to define and measure success

•    Unwillingness or inability to change and adapt to a new reality

•    Unrealistic expectations of what technology and marketing can do

•    Lack of resources and/or budgets

•    Silo mentality within the company

•    Lack of knowledge management

•    Media bias and/or lack of marketing strategy/execution integration

•    Short-term focused

Marketing News:
What specific steps can advertising execs take to better manage their online media efforts and digital marketing efforts? Can you list them, and expand on each one in terms of how they can go about executing them?

Pedro Laboy:
We recommend that marketers focus on the following:

•    Align internally with the organization’s goals

•    Take a media neutral view to marketing and integrate your media efforts

•    Define and measure success and optimize according to results

•    Tie short-term marketing decisions to long-term business objectives

Copyright © 2009 Pedro Laboy